DigitalOcean Holdings (DOCN) Q2 2026 Earnings Report

The call presented a strong set of operational and financial positives: accelerating revenue growth, record incremental ARR, very rapid adoption of the inference engine and AI workloads, robust margins, a significantly larger RPO, and balance sheet improvements. The primary negatives are capacity and timing constraints tied to data center buildouts and industry supply chain realities, RPO lumpiness, and potential effects of recent GPU price increases. On balance, the positive developments (strong growth, profitability, AI traction, and financial flexibility) substantially outweigh the challenges, though execution of capacity plans will be critical to sustain the momentum into 2027.

DigitalOcean raised its 2026 outlook, guiding Q3 revenue of $304–$307 million (32–34% YoY) with adjusted EBITDA margins of 38–39% and non‑GAAP diluted EPS of $0.28–$0.30 on ~126.5 million diluted shares; for full‑year 2026 it now expects $1.17–$1.18 billion of revenue (~30.5% YoY) with a Q4 exit growth rate of ≥35%, ~39% adjusted EBITDA margin, non‑GAAP diluted EPS of $1.35–$1.40 and adjusted free cash flow margin of 11–13%; management also reiterated confidence in 50%+ revenue growth for 2027 and highlighted a strengthened balance sheet after equitizing ~$472 million of convertible notes (pro‑forma net leverage ~0.7x).